In the global financial market of 2025, an unprecedented storm is brewing. The exposure of internal plans within the Federal Reserve has dropped a heavy bomb into the calm waters, plunging the entire market into great panic and uncertainty. Under Powell's leadership, the Fed has completely abandoned the traditional monetary policy framework, restarting interest rate hikes in an almost 'whimsical' manner. This move not only overturns market expectations but also leaves countless retail investors in confusion and anxiety: in the face of this fierce storm, should we kneel and surrender, or choose to turn and run?

I. The Federal Reserve's 'madness': Data failure, policy disorder

The Federal Reserve's monetary policy has always been data-driven, with rigorous economic data and models serving as important bases for its decisions. However, in 2025, this tradition has been completely broken. Currently, global supply chains are facing unprecedented challenges, geopolitical conflicts are escalating, trade protectionism is on the rise, and soaring tariffs have significantly increased global trade costs. These factors intertwine, leading to a severe collapse of supply chains, and when all this reflects in economic data, it becomes complex and difficult to interpret.


In this chaotic situation, the Federal Reserve seems to have lost its direction, abandoning reliance on data and instead acting on subjective feelings. Previously revered economic indicators are now seen as a 'joke' by the Fed. For example, traditional views hold that low unemployment rates usually accompany rising inflation, but in the current environment, despite unemployment remaining low, inflation remains stubbornly high, as if the economic formula has completely collapsed. In fact, the root of this wave of inflation is not demand pulled by rising wages, but rather cost-push inflation caused by disruptions in global supply chains and surging prices for energy and raw materials. The massive money-printing measures taken to respond to the pandemic have long overdrawn the economy's potential, and now we are facing severe backlash, with danger approaching step by step.

II. Soaring interest rates: Hawks in power; no prospect of rate cuts

The current Federal Reserve is firmly controlled by hawkish forces. Most new team members adhere to a tough monetary policy stance, showing almost zero tolerance for inflation. As soon as they see signs of inflation rising, they will unhesitatingly raise interest rates. The speed of rate hikes is astonishing, with market rates soaring in a short period. Even more despairing for investors is that, judging from the current situation, interest rate cuts are nowhere in sight. The signals conveyed internally by the Fed are very clear: there will be no intention to relax monetary policy before the end of the year. This means that for a period of time in the future, the market will continue to bear immense pressure from high interest rates, with rising funding costs, difficulties in corporate financing, and serious constraints on economic growth.

III. Retail Investor Survival Guide: Survival First, Seek Victory in Stability

Faced with such a turbulent market environment, for ordinary retail investors, blindly betting on market direction is undoubtedly a suicidal behavior. At this moment, 'survival' has become the primary goal, and we must abandon wishful thinking and respond to this crisis with a more cautious and rational attitude.

(1) Embrace volatility and manage risks well

Market crashes and surges will become commonplace; severe price fluctuations will make investors' asset accounts feel like they're on a roller coaster. In this situation, we must learn to accept volatility and avoid being swayed by short-term price movements. At the same time, effective risk management is crucial. Reasonably control your position, avoid over-investing, and do not concentrate all your funds in one type of asset. A diversified investment strategy can be adopted, allocating funds across different asset classes such as stocks, bonds, funds, and cash to reduce the impact of a single asset's volatility on the overall asset portfolio.

(II) Cash is king; short-term bonds for hedging

During periods of market uncertainty, cash is undoubtedly the safest and most flexible asset. Holding sufficient cash not only allows us to have enough funds to buy quality assets at low points during market crashes, but also ensures we have enough funds to cope with unexpected situations. Additionally, short-term bonds are also a good safe haven. Compared to long-term bonds, short-term bonds are less sensitive to interest rate fluctuations, which can help resist market risks to some extent. Moreover, short-term bonds have better liquidity, allowing investors to quickly liquidate when they need funds.

(3) Stay vigilant and do not be misled by data

In the current complex economic situation, various economic data and market information are intricate, with many containing false or misleading content. We cannot blindly be optimistic based solely on surface-level 'good' data, nor can we easily believe unsubstantiated market rumors and predictions. We must maintain the ability to think independently, analyze the true situation behind the data in depth, and make rational investment decisions in conjunction with the macroeconomic situation and policy trends. It is important to note that the real market test may not fully unfold until the third quarter, and we must prepare in advance, remaining vigilant and not allowing carelessness to lead to failure before the storm truly arrives.


The Fed's current round of aggressive interest rate hikes has pushed the global financial market to a crossroads filled with challenges and crises. In this war without smoke, the Fed has not played the role of a savior; instead, it has become a catalyst that fuels the fire. For ordinary retail investors, we cannot change the market's direction or influence the Fed's decisions, but we can control our own investment actions. Understanding the current situation, maintaining calm and rationality, and responding to market changes with a quick, decisive, and stable attitude may allow us to survive in this brutal market game and seek new investment opportunities. Remember, in financial markets, survival brings hope; surviving allows us to greet the dawn of the future.
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